This would save me on install costs, means I don't have to have flammable liquids attached to my house, don't have to make a concrete stand for the bottles and it can be put in essentially the same place as the current cylinder (slap bang in the middle of the house).

Now I see that it could make sense for someone in the US where electricity is 6c/kwh or something but in nz its equivalent to US 15c/kwh. Is it still viable? Does anyone have any comparisons? There will be 5/6 people in the house. How do you know what's big enough? There seems to be little info online about them and I trust you guys over average joes.

How cold does it get there? In warmer climates tankless can make sense because the water is already luke warm and it takes less energy to heat it up. The colder the winters, the more powerful water heater you will need and the more hot water you will want.

If you live in Miami, tankless might make sense. In New Zealand(its cold there, right?), probably not.

Surprising as it might sound, with 5/6 people in the house you might really truly come out ahead with a modern tank style heater.

Looks like everyone's in agreement that instant electric heaters are shit, think I'll rethink. It would be reasonably cheap to put a decent cylinder in. With recent events there's a lot of 1 or 2 year old Rheem cylinders kicking about second hand.

US rates are in the 9c range only in the middle of the country. The Northeast and CA are in the 13-16c range. Hawaii is 34c (where solar is very popular) due to needing to import all their energy, first to the West Coast and then to the islands. Handy map: http://www.eia.gov/electricity/state/

Hey just as a side note. If you get a tankless heater strong enough for a new house hold, you may (probably) will need to pull new wiring from breaker box. Most home 220 lines to the water heater are too small for the current of a tankless. Not saying you can't do it, but I do believe to meet the safe amp ratings you will need bigger wires pulled. Keep that in mind if you get one. I was going to get one then I realized I had to pull new wires and didn't feel like it...

Allow me to be a voice in the wilderness on the tankless water heater. We had one put in last January to replace our old gas heated water tank system. (We are in a city, so kept the gas line.) Of relevance to your decision, though, a big factor in our deciding on this was our guys' assessment that because we are very light users (only two people, only use hot water for showers and washing dishes), tankless made sense. If we were more people or otherwise had greater demand for hot water, keeping the tank would have been a reasonable option.

As an aside, the tankless system has worked well, other than its making random, odd dinosaur-belching sounds. But to tell the truth, those sounds have enhanced our day to day enjoyment of life. Such is our life!

Standby heat losses are often over exaggerated by the tankless companies. In reality, HW tanks do not lose heat that quickly. Also, if you live in a cool climate, any heat "loss" helps to warm the house and therefore, is not really lost. However, if you use AC a lot, then that loss has to be cooled.

This fellow calculated a 61 or 82 cent saving per month using tankless, which means the extra cost will never be paid back:

Ok, I've settled for being normal and not trying to beat the system. Doesn't mean I wont put a solar panel up at some point though ;)

Will probably end up only being about 700NZD to fit which will offset any small reduction in monthly savings, I've bought large, practically new cylinders for 300 bucks locally previously and labour shouldn't be more than 400 from a plumber friend of mine.